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Author Topic: Zero Hedge reports High Frequency Trading coming to BTC...  (Read 1318 times)
OROBTC
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April 06, 2015, 05:18:02 PM
 #1

...

Need some more BTC price volatility?  It looks like Wall Street is happy to oblige!

http://www.zerohedge.com/news/2015-04-06/skynet-almost-sentient-hfts-start-trading-bitcoin

Hmm, robot vs. robot trading a synthetic currency?  This may be fun to watch.
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April 06, 2015, 05:50:55 PM
 #2

...

Need some more BTC price volatility?  It looks like Wall Street is happy to oblige!

http://www.zerohedge.com/news/2015-04-06/skynet-almost-sentient-hfts-start-trading-bitcoin

Hmm, robot vs. robot trading a synthetic currency?  This may be fun to watch.

yeah, just more thievery from wall st.
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April 06, 2015, 06:57:53 PM
 #3

And I thought arbitrage was hard now. Looks like 1 full second is going to be an eternity soon.

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April 06, 2015, 08:33:29 PM
 #4

Heh.  Sub-second trading with opportunities to settle only at unpredictable intervals when the blocks come out?  

Dang, I need to cook some popcorn!  This is going to be fun to watch!
CtrlAltBernanke420
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April 06, 2015, 09:23:04 PM
 #5

Heh.  Sub-second trading with opportunities to settle only at unpredictable intervals when the blocks come out?  

Dang, I need to cook some popcorn!  This is going to be fun to watch!

Will we know when this begins…
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April 06, 2015, 09:30:38 PM
 #6

they fail.

because exchange apply tax ... and bitcoin network apply tax.

 Grin sorry, folks.

no shadow trading in nanoseconds here ...  Roll Eyes
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April 06, 2015, 10:57:15 PM
 #7

they fail.

because exchange apply tax ... and bitcoin network apply tax.

 Grin sorry, folks.

no shadow trading in nanoseconds here ...  Roll Eyes
Even if you put those taxes into the equation, trading with cryptocurrencies is way better (and more fun) than with the same old ass assets.

Meuh6879
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April 06, 2015, 11:02:02 PM
 #8

that, it's true ... but it's not cheap  Cheesy and traders don't love to pay tax for "every transaction".
if yes, financial crisis will be solve from decade now.  Roll Eyes
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April 06, 2015, 11:09:26 PM
 #9

Amazing:
Quote
One persistent problem for the bitcoin market is it can be hard to trade because there aren’t enough buyers and sellers at exchanges.

I have never experienced a shortage of buyers nor sellers. Did anyone, or am I playing too small?
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April 06, 2015, 11:58:01 PM
 #10

that, it's true ... but it's not cheap  Cheesy and traders don't love to pay tax for "every transaction".
if yes, financial crisis will be solve from decade now.  Roll Eyes

They would probably negotiate a deal with exchanges.
And the transaction fee is really negligible when you are dealing with large amounts. I presume they won't be dealing with dust.  Tongue


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kelsey
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April 07, 2015, 12:00:51 AM
 #11

Amazing:
Quote
One persistent problem for the bitcoin market is it can be hard to trade because there aren’t enough buyers and sellers at exchanges.

I have never experienced a shortage of buyers nor sellers. Did anyone, or am I playing too small?


well yes for wall street bitcoin liquidity is on the small side (though its marketcap of in the billions is nothing to be sneezed at, even for wall street)
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April 07, 2015, 01:40:26 AM
 #12

...

Need some more BTC price volatility?  It looks like Wall Street is happy to oblige!

http://www.zerohedge.com/news/2015-04-06/skynet-almost-sentient-hfts-start-trading-bitcoin

Hmm, robot vs. robot trading a synthetic currency?  This may be fun to watch.

There is nothing inherent to HFT that would cause higher volatility.  Increased volume in general may cause higher volatility in the short run, and lower volatility once the volume stabilizes.

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April 07, 2015, 01:59:27 AM
 #13


What it takes to get really stupid volatility is  two or more robots, all trying to be faster than the others and programmed in a way that, taken together, generates positive feedback. 

You see smaller versions of this on Amazon sometimes.  A while back two different people came out with 'how to write a compiler' books, and unbeknownst to each other, they both used dynamic-pricing bots.  One guy had one that kept setting his price $4 below the other guy's, and the other guy had one that kept setting his price $6 over the first guy's.  Before the end of the first day, they were (both) priced a bit over US$14000.   Cheesy  Not generating many sales at that price, but hey, at that price a few would be enough!

Anyway, the guys with the robot-traders fiddle their algorithms six times a day, always trying to outguess each other, and they like to buy as soon as something shows an uptick - which drives the price up so others buy because, hey, uptick, etc.  Same thing with selling "at the top" -- if everybody does it, it creates the crash that defines what went before as the "top."  They've gotten some experience with what's likely to cause explosions and gotten better at not doing that, but multi-bot interactions with dozens or hundreds of bots will usually contain at least a few sets that generate positive feedback.  Depending on how much money the bots in those sets control, you still get things going boom - or crash - every so often. 

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April 07, 2015, 02:02:28 AM
 #14

...

Need some more BTC price volatility?  It looks like Wall Street is happy to oblige!

http://www.zerohedge.com/news/2015-04-06/skynet-almost-sentient-hfts-start-trading-bitcoin

Hmm, robot vs. robot trading a synthetic currency?  This may be fun to watch.

There is nothing inherent to HFT that would cause higher volatility.  Increased volume in general may cause higher volatility in the short run, and lower volatility once the volume stabilizes.
Quote
Amusingly, the WSJ says that "their involvement could help reduce volatility in the market for bitcoin, which has struggled to gain legitimacy in part because of concerns about wild swings in its price." Uhm, no: the arrival of HFT in any asset class merely assures that volatility surges to the moon, especially when it is an asset that trades without explicit central bank backing such as stocks, or FX.
I don't think just the big players' involvement will stablize the price. But it is a good beginning, which will bring more big finincial institution in WS or anywhere, or individual traders to come to this market. Until then no big players can easily control the price.
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April 07, 2015, 02:21:53 AM
 #15

Willie bot sent us over 1k. 2 major bots might be the "moon" everyone is hoping for. I would rather have slow steady growth than crazy boom and bust periods but it should be fun for traders.

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April 07, 2015, 05:16:47 AM
 #16

yes, if a doofus like Karepeles can set up some bots to manipulate the price, these big players will be able to do whatever they like. don't think they don't already, where ever they spot an opportunity. At least we might see another bubble ATH soon. that would be nice.

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April 07, 2015, 05:47:50 AM
 #17

Still waiting for a single trade of any frequency on Silbert's OTC market. This stuff is always exciting until it isn't...

http://www.otcmarkets.com/stock/GBTC/quote
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April 07, 2015, 05:53:46 AM
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Btc has been volatile today. But more volatility is always welcome Cheesy i wonder if this will cause the markets to be more volatile...

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April 07, 2015, 06:22:59 AM
 #19

I will be at dawn patrol when the waves start firing, dude.

My ignore list here: https://bitcointalk.org/index.php?topic=1652334.0 +++ GPG Public key FFBD756C24B54962E6A772EA1C680D74DB714D40 +++ http://pgp.mit.edu/pks/lookup?op=get&search=0x1C680D74DB714D40
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April 07, 2015, 07:24:34 AM
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What it takes to get really stupid volatility is  two or more robots, all trying to be faster than the others and programmed in a way that, taken together, generates positive feedback.  

You see smaller versions of this on Amazon sometimes.  A while back two different people came out with 'how to write a compiler' books, and unbeknownst to each other, they both used dynamic-pricing bots.  One guy had one that kept setting his price $4 below the other guy's, and the other guy had one that kept setting his price $6 over the first guy's.  Before the end of the first day, they were (both) priced a bit over US$14000.   Cheesy  Not generating many sales at that price, but hey, at that price a few would be enough!

Anyway, the guys with the robot-traders fiddle their algorithms six times a day, always trying to outguess each other, and they like to buy as soon as something shows an uptick - which drives the price up so others buy because, hey, uptick, etc.  Same thing with selling "at the top" -- if everybody does it, it creates the crash that defines what went before as the "top."  They've gotten some experience with what's likely to cause explosions and gotten better at not doing that, but multi-bot interactions with dozens or hundreds of bots will usually contain at least a few sets that generate positive feedback.  Depending on how much money the bots in those sets control, you still get things going boom - or crash - every so often.  



I think that kind of situation would really only happen if the market was so thin that a few bots were the majority of volume.  Algorithmic trading makes up the majority of many markets nowadays, but there are enough players and large enough volume that volatility changes are negligible.  The price action in the forex world today is indistinguishable from that of a decade ago, despite the proliferation of HFT.


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